HB 5823 Summary

• Adds Chapter 17 to the Insurance Code requiring insurers to maintain a risk management framework to identify, assess, monitor, and manage material and relevant risks.

• Requires insurers to conduct an Own Risk and Solvency Assessment (ORSA) annually and whenever significant changes occur to risk profile, following guidance manual procedures adopted by the director.

• Exempts insurers with less than $500,000,000 in annual direct written and unaffiliated assumed premium, and insurance groups with less than $1,000,000,000, from ORSA requirements unless the director determines unique circumstances warrant compliance.

• Requires eligible insurers to annually submit ORSA summary reports to the director signed by the chief risk officer or equivalent executive, attesting to compliance with enterprise risk management processes.

• Establishes ORSA-related documents as confidential and privileged, exempt from public disclosure and discovery in civil actions, but allows the director to share information with other regulators and the NAIC under written confidentiality agreements.

• Imposes civil fines of $1,000 per day for late ORSA submissions, with a maximum penalty of $75,000, which the director may reduce for demonstrated financial hardship.

• Takes effect January 1, 2015, contingent on enactment of HB 5792.